Non-permanent employees to be treated like full-time workers
Employee benefit providers have called on intermediaries to revisit clients' employee benefits packages, in light of the Fixed-Term Employees Regulations 2002, which came into effect in October this year. The regulations ensure non-permanent employees are not treated less favourably than full-time employees performing the same role.
Susan Sneddon, development manager at Scottish Equitable Employee Benefits, said: 'We are keen to ensure advisers appreciate that if an employer has fixed-term employees on their payroll, they need to be aware of the regulation terms and may have to rethink employee benefits. If employers have a permanent employee doing broadly comparable work, employers may have a discrimination issue on their hands.'
The regulations state that unless an employer can justify it, in terms of business objectives, fixed-term workers must be given similar conditions including employee benefits to full-time workers. However, this does not necessarily mean giving them the same benefits.
Catherine Baxter, group product manager at Swiss Life, explained: 'The regulation does not require a term by term comparison between the two types of worker. For some fixed-term workers it could be argued that it would be better to give them an increased salary, so they could buy individual policies they could take with them from contract to contract.
'If a product, such as group income protection, has a long deferred period, then it may not be worth offering to an employee on a short contract, in which case perhaps a cash alternative would be more apt. Life and critical illness, however, should be offered on exactly the same terms.'
Those covered by the new regulation include people employed for a specified period of time or for the duration of a specific project. It does not cover those employed via an agency, apprentices, or students on work placements of a year or less.
Students with holiday jobs, or gap year students working for a fixed term that does not constitute part of their course are covered by the rule.
